Towards a 2nd Energy Infrastructure Package?

Preliminary ideas

Leonardo Meeus & Nico Keyaerts

7th FSR & BNetzA Forum on Legal Issues of Energy Regulation
6 February 2015, Berlin
 Towards a 2nd Energy Infrastructure Package?
First we need to improve implementation of the first package

FSR Policy Brief on CBA (Jan 2013 – Jan 2014)

• CBA should concentrate on a reduced list of effects and those should be monetized
• Infrastructure costs need to be disaggregated

FSR Policy Brief on CBCA (Jan 2014)

• A lot of room for innovation by project promoters and NRAs, i.e. entering into formal
contracts based on CBA results for grouped rather than individual projects
• In case they cannot agree, ACER should only intervene in some cases (i.e. likely net loser)

FSR Policy Brief on TSO incentives (Sep 2014)

• Benchmark national investment frameworks
• TSO incentives & CBCA: UK-Belgium joint incentive package for the NEMO

FSR Policy Brief on CBCA (Feb 2015)

• Innovation is ongoing: 3 projects in which promoters and NRAs agreed on a compensation;
ACER only intervened in 1/13 cases, and case includes likely net loser
• Seven projects have an incomplete CBCA because they rely on a CEF grant request

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 Since when do we have a first package?
When could a second package be introduced?
• First package
– Adopted in 2013
– Applied to a first list of projects in 2014
– Improved implementation for second
list of projects in 2016
• To be evaluated by 2017: proposal
for amendments?
• Budget comitted till 2020: new
budget = 2nd package?

• And what about Juncker investment plan &

Energy Union? Will it include ideas for a 2nd
package (mini-maxi)?

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 Towards a 2nd Energy Infrastructure Package?
2 issues – 4 questions regarding first package

• Avoid bad projects (i.e. stranded assets)

– Do we have sufficient grid user participation?
– Do we have sufficient transmission and distribution (T&D)
coordination?
• Accelerate good projects
– Do we have sufficient harmonization of national decision processes?
– Do we have sufficient solidarity between MS?

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 Towards a 2nd Energy Infrastructure Package?
Grid user participation

Current practice
• ENTSO-E makes scenarios and organizes a workshop to consult industry associations, and
other interested parties
• Exceptionally: grid user participation in third party regulated and merchant projects

Improving the implementation of the 1st package

• Clarifying alignment of ENTSO-E scenarios with EU scenarios (e.g. Roadmap 2050)
• Earlier consultation for ENTSO-E scenarios

Amending the 1st package

• Non-firm user commitment: mandatory market test (market consultation, e.g. UK-continent
interconnectors) for all projects (today only for gas)

Replacing the 1st package with a 2nd package

• Firm user commitment: mandatory financial transmission rights auctioning / long term
capacity bookings (e.g. open season in gas)

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 Towards a 2nd Energy Infrastructure Package?
Transmission & Distribution (T&D) coordination

Current practice
• National consistency check for T&D investment planning, followed by a EU consistency check
of the national transmission plans (TYNDP)

Improving the implementation of the 1st package

• Voluntary T&D investment consistency checks

Amending the 1st package

• Mandatory T&D investment consistency checks

Replacing the 1st package with a 2nd package

• Top down EU or Regional integrated T&D investment planning

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 Towards a 2nd Energy Infrastructure Package?
Harmonization national decision process

Current practice
• First steps towards more harmonized procedures for information provision, permit granting,
TSO incentives, and cost allocation

Improving the implementation of the 1st package

• Lots of opportunities for better implementation, and spreading best practices

Amending the 1st package

• Mandatory best practice

Replacing the 1st package with a 2nd package

• National decision process with penalties for unjustified delays (keep infra veto but risk fines)
• Or EU decision process (MS voluntary give away infrastructure veto to avoid fines)

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 Towards a 2nd Energy Infrastructure Package?
Solidarity among Member States

Current practice
• Solidarity limited to affordability (i.e. priority for limited CEF fund)
• Beneficiaries pay principle, with national cost efficiency check

Improving the implementation of the 1st package

• One stop shop for EU financing with CEF grants as last resort
• EU method for national cost efficiency checks

Amending the 1st package

• From cost sharing towards sharing benefits: pool congestion revenues (could be limited to
new revenues generated by new projects)

Replacing the 1st package with a 2nd package

• Socialize investment costs at EU or regional level
• EU cost efficiency check

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 Towards a 2nd Energy Infrastructure Package?
Answer depends on which of the following statements is most convincing to you

Yes
• We need firm grid user participation to avoid bad projects
• We need integrated T&D planning to avoid bad projects
• We need binding investment decision process to accelerate good projects
• We need solidarity beyond affordability to accelerate good projects
And we think that this needs to be pushed at EU level

No
• We should first improve the implementation of the 1st package
• We can also do amendments to fix some issues with the 1st package

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Thanks for your attention!
leonardo.meeus@eui.eu
nico.keyaerts@eui.eu